📘 Crypto From Zero to Pro
🟢 Day 15/200
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Centralized vs Decentralized Exchanges 🔄
Buying and selling crypto usually starts with an exchange.
But not all exchanges work the same way.
There are two main types:
1:- Centralized Exchanges (CEX)
2:- Decentralized Exchanges (DEX)
Understanding the difference is crucial for security, control, and risk management.
🔍 What Is a Centralized Exchange (CEX)?
A centralized exchange is a platform managed by a company that acts as a middleman between buyers and sellers.
Examples include popular crypto trading platforms where:
• You create an account
• Complete verification (KYC)
• Deposit funds
• Trade using the platform
Key features of CEX 💯
• Easy to use for beginners
• High liquidity and fast trades
• Customer support available
But there’s a trade-off 🚨
When you use a centralized exchange, you do not control the private keys. The exchange holds your crypto on your behalf.
That means you are trusting a third party.
🔍 What Is a Decentralized Exchange (DEX)?
A decentralized exchange allows users to trade directly from their wallets without a middleman.
DEXs use smart contracts instead of companies.
Key features of DEX 💯
• No account or KYC required
• You keep control of your private keys
• Trades happen directly on the blockchain
DEXs give you true ownership and control, but they also require more responsibility.
⚖️ CEX vs DEX, Key Differences
Centralized Exchanges (CEX):-
• Beginner-friendly
• Custody of funds held by exchange
• Higher risk of hacks or freezes
Decentralized Exchanges (DEX):-
• Full control of your crypto
• No third-party custody
• Higher responsibility and learning curve
⚠️ Important Beginner Insight
Many beginners start with CEXs — and that’s okay.
But keeping large amounts on exchanges long-term increases risk.
Smart users:
""Trade on exchanges
Store funds in wallets""
This balance improves both convenience and security.
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